Publish Date : 21-Jan-2017
AGL Energy Limited (AGL) today announced that it has reached financial close on the sale of the 200 MW Silverton wind farm project in western New South Wales, to the Powering Australian Renewables Fund (PARF), a partnership between AGL, QIC and Future Fund for the development of approximately 1,000 MW of large-scale renewable energy projects.
The $36 million sale includes AGL writing an offtake agreement with the Silverton wind farm. AGL expects to recognise approximately nil profit on sale from the transaction.
The lenders to Silverton Wind Farm are: Westpac Banking Corporation, National Australia Bank, Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Financial Group, Societe Generale and DBS Bank.
The acquisition includes AGL writing an offtake agreement with Silverton Wind Farm. AGLs bundled offtake price from Silverton Wind Farm will be $65/MWh (real) for an initial five year period. There is a put/call option to extend for the following five years at the same or lower price.
AGL Managing Director & CEO, Andy Vesey, said: Building more renewables is a key commitment of our Greenhouse Gas Policy. Todays announcement and our broader strategy of setting up the PARF to enable investment is a tangible demonstration of this.
Reaching financial close on the Silverton wind farm is a major milestone for PARF. Silverton is the first new renewable project build offered to the Fund, following the sale of AGLs already developed solar plants at Nyngan and Broken Hill in November 2016.
The momentum were experiencing with PARF is pleasing and proves that investor support exists for large-scale renewables development. However, further comprehensive policy changes are required to facilitate Australias transition to a low-carbon economy, said Mr Vesey.
AGL Chief Financial Officer, Brett Redman, said: The sale of Silverton reinforces our belief that the PARF, while innovative, is also a very workable financing vehicle, which enables the competitive funding of new renewable projects. Weve seen strong lender support for the PARF projects to date, which has resulted in a competitive cost of funds.
Ross Israel, Head of Global Infrastructure at QIC, said: This is a significant milestone for PARF in the delivery of its project pipeline. It demonstrates our ability to structure a strong, long-term relationship with our strategic partner AGL and our managed client, Future Fund. We are very pleased that in the first six months of establishing PARF there are three major investments in the partnership, including the first greenfield project.
On behalf of PARF, AGL will develop and manage approximately 1,000 MW of large-scale renewable energy infrastructure assets and projects. This represents 20 percent of the estimated1 5,000 MW of new renewable generation capacity required by 2020 to meet the Federal Governments Renewable Energy Target (RET).
AGL provided $200 million in equity funding to the PARF, QIC, on behalf of its clients the Future Fund and the QIC Global Infrastructure Fund, provided equity funding of $800 million.
AGL has also named a joint venture consisting of GE and CATCON as the successful tenderer for the engineering procurement contract at Silverton. AGL and GE/CATCON will develop the approximately $450 million Silverton wind farm, which is targeted to be fully operational by the middle of 2018.
The 200 MW Silverton Wind Farm and will produce approximately 780,000 MWh of renewable energy annually, which can power more than 137,000 average Australian homes. The renewable energy produced from the wind farms 58 turbines, will reduce CO2 emissions by 655,000 tonnes annually, which is the equivalent of taking 192,000 cars off the road each year.
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